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Question 9 Borges Machine Shop, Inc., has a 1-year contract for the production of 250,000 gear housings for a new offroad vehicle. Owner Luis Borges

Question 9

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Borges Machine Shop, Inc., has a 1-year contract for the production of 250,000 gear housings for a new offroad vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are generalpurpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow: i: General-Purpose Flexible Manufacturing Dedicated Equipment (GPE) System (FMS) Machine (DM) Annual contracted units 250,000 250,000 250,000 Annual fixed cost $150,000 $250,000 $480,000 Per unit variable cost $18.00 $14.00 $13.00 The option GPE is best when the contracted volume is below 0 units (enter your response as a whole number). The option FMS is best when the contracted volume is between 0 and '0 units (enter your responses as whole numbers). The option DM is best when the contracted volume is over 0 units (enter your response as a whole number). Tim Urban, owner/manager of Urban's Motor Court in Key West, is considering outsourcing the daily room cleanup for his motel to Duffy's Maid Service. TIm rents an average of 50 rooms for each of 365 nights (365 x 50 equals the total rooms rented for the year). Tim's cost to clean a room is $12.50. The Duffy's Maid Service quote is $19.00 per room plus a xed cost of $26,000 for sundry items such as uniforms with the motel's name. Tim's annual fixed cost for space, equipment, and supplies is $61,000. Based on the given information related to costs for each of the options, the crossover point for Tim = 0 room nights (round your response to the nearest whole number). If the number of room nights is less than the crossover point, then V is the best option available to Tim. Based on the given room nights that Tim expects to rent (18,250), the best option is El outsourcing not outsourcing Metters Cabinets, Inc., needs to choose a production method for its new ofce shelf, the Maxistand. To help accomplish this, the firm has gathered the following production cost data: El Annualized Fixed Cost Variable Costs (per unit) (5) Process Type of Plant & Equipment Labor Material Energy Mass Customization $1,260,000 30 18 12 Intermittent $1,000,000 24 26 20 Repetitive $1,600,000 28 15 12 Continuous $2,000,000 25 15 10 Metters Cabinets projects an annual demand of 60,000 units for the Maxistand. The selling price for the Maxistand is $120 per unit. a) Based on the projected annual demand, the best alternative available is to use the ':| process. b) The value of annual profit using this method is $ 0 . (Enter your response as an inte Repetitive Continuous Mass Customization Intermittent Please copy and paste data from text area below. Selected delimiter:- Process Type Annualized Fixed Cost of Plant & Equipment Labor Material Mass Customization $1,260,000 30 18 12 Intermittent $1,000,000 24 26 20 Repetitive $1,600,000 28 15 12 Continuous $2,000,000 25 15 10 Please copy and paste data from text area below. Selected delimiter:- GeneralPurpose Equipment (GPE) Flexible Manufacturing System (FMS) Annual contracted units 250,000 250,000 250,000 Annual fixed cost $150,000 $250,000 $480,000 Per unit variable cost $18.00 $14.00 $13.00 Dedicated Ma

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